Transcript BUS 243 Introduction to Marketing & Distribution

Chapter 2
Company & Marketing Strategy
Partnering to Build
Customer Relationships
Professor Marshall
Queens College
Strategic Planning
The process of developing and
maintaining a strategic fit between the
organization’s goals and capabilities and
its changing marketing opportunities.
Steps in Strategic Planning
1. Defining the company mission
2. Setting company objectives and goals
3. Designing the business portfolio
4. Planning marketing and other functional
strategies
Mission Statement
A statement representing the organization’s
purpose – what it wants to accomplish.
Note: you can usually find a company’s mission statement on their website under
‘Investor Relations’ or ‘Corporate information’.
ebay’s Mission: http://pages.ebay.com/aboutebay/thecompany/companyoverview.html
Mission Statement Guidelines
Should be market oriented and defined in
terms of customer needs. Example: Charles Schwab –
‘guardian of its customers’ financial dreams’
Should be realistic
Should be specific (not too narrow or
broad)
Should fit the market environment. Example:
Girl Scouts old: ‘to prepare young girls for motherhood and wifely duties’ –
new: ‘where girls grow strong’.
Should be motivating.
‘make people happy’.
Example: Walt Disney aims to
Designing the Business Portfolio
The business portfolio is the collection of
businesses and products that make up the
company.
The company must:
– analyze its current business portfolio or
Strategic Business Units (SBUs),
– decide which SBUs should receive more,
less, or no investment,
– develop growth strategies for growth or
downsizing.
An SBU can be a company division, a product line, or a single product or brand.
It has a separate mission & can be planned independently from other company businesses
The BCG Growth-Share Matrix
High
Low
Market Growth Rate
Star
Question Mark
Often need heavy investment to
finance rapid growth.
These turn into Cash Cows.
Require a lot of cash to hold
market share. Some are built into
stars and some are phased out.
Cash Cow
Dog
Established. Need less
investment to hold market share.
These support other SBUs.
May generate enough cash to
sustain themselves but do not
support other SBUs.
High
Low
Relative Market Share
The size of the circles is proportional to the SBU’s dollar sales.
Each SBU has a life cycle and over time, SBUs change positions in the matrix. The
company needs to keep adding new products so that some will become stars & cash cows.
The BCG Growth-Share Matrix
Example: Macintosh
Star
Question Mark
High
Low
Market Growth Rate
iPod
Cash Cow
Dog
Mac Computers
MacOS
High
Low
Relative Market Share
Relative Market Share: the ratio of sales of a particular brand to total sales of that
product type in a defined region (country).
Ways to Research Market Share
10K Reports
SIC Codes (Standard Industry
Classification)
NAICS Codes (North American Industry
Classification)
Use Library Databases & Journals to look
up articles related to the company/industry
Problems with Matrix Approaches
Difficult to quantify market share and
market growth.
Focus on current business not future
planning.
Companies have shifted toward
customized, decentralized approaches to
strategic planning.
Product/Market Expansion Grid
Strategies for company growth
Existing Products
Existing Markets
New Markets
Market Penetration
Increasing sales of current
products to current market
segments without changing the
product.
Market Development
Identifying and developing new
market segments for current
products.
New Products
Product Development
Offering modified or new
products to current market
segments.
Diversification
Starting up or acquiring
businesses outside the
company’s current products
and markets.
Product/Market Expansion Grid
Examples of Starbucks’ growth
Existing Products
Existing Markets
New Markets
Market Penetration
Starbucks is adding 23 stores
per week.
Market Development
Starbucks might consider new
demographic markets (for
example: senior citizens or
different ethnic groups).
New Products
Product Development
Starbucks recently added hot
breakfast sandwiches to its
menu.
Diversification
Starbucks tested new
restaurant concepts in San
Francisco to enter a new
related market.
Marketing’s Role in
Strategic Planning
The major functional departments in each unit of the
company – marketing, finance, accounting, purchasing,
operations, information systems, human resources, and
others - must work together to accomplish the strategic
objectives.
Provide a guiding philosophy (the
marketing concept)
Provide inputs to strategic planners
Design strategies to reach objectives
Value Delivery Network
Company’s value chain – internal
departments that must perform and
coordinate activities
Distributors (for example Pepsi has
partnered with the college dining halls)
Suppliers (for example Dell has partnered
with Microsoft and Intel)
Marketing Strategy
The following steps help the company
choose which customers to serve and
how:
Market Segmentation
Target Marketing
Market Positioning
Market Segmentation
The process of dividing a market into
distinct groups of buyers with different
needs, characteristics, or behavior who
might require separate products of
marketing programs.
A market segment consists of consumers
who respond in a similar way to a given
set of marketing efforts.
Target Marketing
Involves evaluating each market
segment’s attractiveness and selecting
one or more segments to enter.
Target segments that can sustain
profitability.
Market Positioning
Arranging for a product to occupy a clear,
distinctive, and desirable place relative to
competing products in the minds of target
consumers.
Begins with differentiating the company’s
marketing offer so it gives consumers
more value.
Marketing Mix
The set of
controllable, tactical
marketing tools that
the firm blends to
produce the response
it wants in the target
market.
Consists of the 4 Ps
1.Product
2.Price
3.Place
4.Promotion
Product
Price
Variety
Quality
Design
Features
Brand Name
Packaging
Services
List Price
Discounts
Allowances
Payment Period
Credit Terms
Target
Customers
Intended
Positioning
Promotion
Advertising
Personal Selling
Sales Promotion
Public Relations
Place
Channels
Coverage
Assortments
Locations
Inventory
Transportation
Logistics
The 4 P’s & the 4 C’s of the
Marketing Mix
4 P’s - Seller’s View
– Product
– Price
– Place
– Promotion
4 C’s - Buyer’s View
– Customer Solution
– Customer Cost
– Convenience
– Communication
SWOT Analysis
An analysis of your company verses competition
Strengths
Competitive Advantages
Opportunities
Favorable conditions that could
yield rewards
Weaknesses
Limitations the firm has in its
marketing strategy
Threats
Barriers that may prevent the
firm from reaching its goals
SWOT Analysis
An analysis of your company verses competition
Strengths
Weaknesses
your specialist marketing expertise
a new, innovative product or service
location of your business
quality processes and procedures
any other aspect of your business that adds
value to your product or service
lack of marketing expertise
undifferentiated products or services (i.e. in
relation to your competitors)
location of your business
poor quality goods or services
damaged reputation
Opportunities
a developing market such as the Internet
mergers, joint ventures or strategic alliances
moving into new market segments that offer
improved profits
a new international market
a market vacated by an ineffective competitor
Threats
a new competitor in your home market
price wars with competitors
a competitor has a new, innovative product or
service
competitors have superior access to channels
of distribution
taxation is introduced on your product or service
http://www.marketingteacher.com/SWOT/walmart_swot.htm
http://www.marketingteacher.com/SWOT/starbucks_swot.htm
Sections of Marketing Plan
1.
2.
3.
4.
5.
6.
7.
8.
Executive summary – summarizes main goals
Current marketing situation
Analysis of threats and opportunities that the
product might face
Objectives for the brand
Marketing strategy
Action programs – what/when/who
Marketing budget – expected costs & revenues
Controls – how progress is monitored
http://college.hmco.com/business/pride/foundations/1e/students/sample/sample.pdf
Marketing Control Process
Set Goals
Measure Performance
Evaluate Performance
Take Corrective Action
Marketing Department
Organization
Functional Organization – by marketing
activity (sales, advertising, etc.)
Geographic Organization – by location
Product Management Organization – by
product or brand
Market or Customer Organization – by
market/type of customer
Combination
Video Case
Dunkin’ Donuts
(10 minutes)
Thoughts
Is Dunkin’ Donuts more product-oriented
or customer-oriented?
How would you prepare against the
invasion of Starbucks and Krispy Kreme?
https://www.dunkindonuts.com
http://www.starbucks.com
http://www.krispykreme.com